ABC Notes Flaws in H-2B Wage Rule

ABC submitted comments June 9 opposing an interim final rule on how wages for temporary, non-agricultural H-2B workers should be calculated. The “emergency” interim final rule, issued April 24 by the U.S. Departments of Homeland Security (DHS) and Labor (DOL), was effective immediately.

Under the interim final rule, the four-tier wage system from the 2008 methodology is replaced with the average wage from the Bureau of Labor Statistics’ Occupational Employment Statistics (OES) survey. It permits employers to use wages calculated under the Davis-Bacon Act, but does not require such wage rates unless the H-2B workers are working on a federal construction project. The rule also requires union signatories to pay the wage rates stipulated in their respective collective bargaining agreements—a provision that remains unchanged from previous rules.

The interim final rule differs from a 2011 final rule, which is currently blocked by a continuing appropriations resolution that will not fund it, because it does not contain a provision that required employers to pay the highest wage of the various wage options. That provision would have set wages well above the above market value and would have expanded the use of Davis-Bacon to non-federal work.

In its comments, ABC applauded DOL and DHS for removing that provision, but still primarily opposed the rule because it will be detrimental to the long-standing success of the H-2B program and its participants – particularly small businesses. ABC noted that the use of Davis-Bacon Act wages should remain voluntary because the Davis-Bacon rates are grossly inflated and mandating their use would render the H-2B program unusable for the vast majority of employers.

In addition, ABC pointed out that the Wage and Hour Division’s failure to provide information on job duties for each Davis-Bacon wage rate will unnecessarily complicate visa wage determinations.

ABC also supported the comments filed by the H-2B Workforce Coalition, of which ABC is a member. In those comments, the coalition noted that employers could face an average increase of $2.94 – or 32.3 percent – by using the average OES wage rates in the interim final rule.

“The challenges faced in the current economic environment by construction industry small businesses that rely on the H-2B program will be significantly compounded by DOL’s proposed rule,” ABC wrote. “It is entirely possible that more small businesses will be forced to close their doors as a result.”